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Offshore overnight yuan rate goes negative briefly


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Offshore overnight yuan rate goes negative briefly
By Gregor Stuart
Published: Apr 1, 2016 7:12 a.m. ET

Borrowing rates for the yuan briefly became the latest to go negative this week, as overnight interbank rates in Hong Kong briefly fell below zero for the first time, in what analysts said was a market anomaly attributable to a recent rule change by China's central bank.

The overnight yuan Hong Kong interbank offered rate, or Hibor, which determines the rate banks in the city pay to borrow Chinese yuan from one another in the offshore market, fell to minus 3.725% on Thursday. The rate, which is fixed daily by Hong Kong's Treasury Markets Association based on market quotes, was 1.048% the previous day. On Friday, the rate rebounded to 1.4555%.